The Government had been blaming the Resource Management Act for a decade, but a crackdown on property speculation and a state-backed housing programme was what was needed.

"The truth is, they are paralysed with fear that the bubble will burst on their watch, so don't want to tackle the causes of the crisis."

The report said historically New Zealand's "median multiple" had been at affordable levels and so had Australia, Canada, Ireland, the United Kingdom and the US.

"However, in recent decades, house prices have been decoupled from this relationship in a number of markets, such as Vancouver, Sydney, San Francisco, London, Auckland and others."

Strict city limits seemed to be the cause.

"Without exception, these markets have severe land use restrictions, typically "urban containment" policies that severely ration land for development on the urban periphery."

However, there were "encouraging developments" at higher levels of government in New Zealand and the US state of Florida.

Demographia said high house prices had profound economic consequences, with those who were younger or on lower incomes at greater risk.

Pavletich blamed public policy for Auckland's soaring housing market but there was growing political consensus that tight land supply and inadequate financing for infrastructure were the keys to address.

"The problems and solutions have been well known for a long time. The only ingredient missing is political action at the local and central areas of Government," Pavletich said.

Housing Minister Nick Smith pointed to the overall cost of housing affordability in New Zealand which Demographia had found had improved, falling to 5.2 in 2016 from 6.3 in 2008.

Another factor which had to be taken into account was the historic low level of interest rates, he said.

"When interest rates are included, home ownership is significantly more affordable now than when National came to office."

Smith also pointed to two other housing affordability surveys which showed that housing had peaked several years ago.

The AMP 360 Home Loan Affordability Series had the mortgage on an average-priced house in 2008 at 83.4 per cent of an average income. It was now 58.4 per cent, Smith said.

The Massey University Housing Affordability Index showed affordability was at its worst seven years ago, when it was at 33.9 per cent. It is now at 22.8 per cent.

However, Smith said it was encouraging that Demographia had made specific mention of the Government's progress in tackling severe land use restrictions, "which it singles out as a common factor in high house prices internationally".

The next step after reforming the RMA was to consult on a new "urban development national policy statement."

The Productivity Commission is currently doing a major piece of research on the impact of planning on New Zealand's housing shortages.

Five other New Zealand cities were mentioned when the survey included cities with populations below a million: